market failure

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  • Market Failure
    • public goods
      • non -excludable
      • non - rivalry
      • Free Rider Problem
        • public goods are provided for all - can't be withheld
        • e.g. streetlights
      • e.g. National defence
    • asymmetric information
      • when one party in a transaction has more information than another
      • e.g. car sales
    • government intervention
      • internalising the external cost
        • tradable permits
        • regulation
        • indirect taxes
        • property rights
        • subisidies
      • Information provision
        • educating on the information given
      • Min/Max prices
        • minimum
        • maximum
        • helps maintain farmers incomes
        • prevents too high prices for consumers
    • government failure
      • high admin costs
      • information gaps
      • e.g. rent controls in housing market
  • all public goods are merit goods but not vice versa

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